In an independent private values Dutch auction, the more bidders there are in the auction, the_______ the next- highest valuation and the _______each participant should reduce their bid.

Question

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In an independent private values Dutch auction, as the number of bidders increases, the next-highest valuation is likely to be closer to the highest valuation due to the larger sample of valuations. Consequently, each participant should reduce their bid less because the competition is tighter, making it more likely for bids close to their true valuation to win.

In an Independent Private Values Dutch Auction, the More Bidders